Orsted is on course to record operating profit of Dkr18bn (€2400m) for 2020, up from its Dkr16-17bn guidance.
The Danish offshore wind giant said the better than expected performance, to be confirmed in next month’s annual report, is “primarily of temporary nature”.
However, it is also down to a “strong operational performance throughout the group” in the final months of the year.
“We achieved higher than expected earnings from our operating assets and trading related to hedging of our power exposures, and we saw positive temporary effects in our gas portfolio business due to higher gas prices at year-end,” the company said in a statement on Tuesday.
“In addition, fixed costs came in lower than expected throughout the Group, and we had lower than expected project development costs in the US, mainly due to timing.”
Orsted has also set out its guidance for 2021, with operating profit of Dkr15-16bn expected.
This includes lower earnings in offshore, compared to the expected 2020 result of Dkr14.8bn.
“In 2021, we expect an increase in expensed project development costs, O&M costs related to Greater Changhua 1&2a and Hornsea 2 before they commence generation in 2022, higher TNUoS charges, and lower earnings from Horns Rev 2 which came out of subsidy period in October 2020.”
It added: “Finally, 2020 had higher than normal wind speeds, which constitutes the largest negative impact year on year.”
The latest guidance does not include earnings from new partnership agreements as it is difficult to predict the exact timing of potential farm-downs as well as the distribution of income between years if the partnership includes a construction agreement, the company said.
In terms of new partnerships in 2021, Orsted expects to close the 50% farm-down of Greater Changhua 1 and to farm-down a 50 % share of Borssele 1&2 around summer.
“Finally, we will explore the possibility of a farm-down of our solar PV portfolio following the commissioning of Muscle Shoals in Q3. While we have not included any gains from these farm-downs in our guidance, we have assumed a derived reduction in site earnings.”